Joan Mary Sheridan v Minter Ellison Morris Fletcher Solicitors [1995] IRCA 721

DECISION NO: 721/96 CATCHWORDS INDUSTRIAL LAW, TERMINATION OF EMPLOYMENT, PROBATIONARY EMPLOYMENT. Industrial Relations Act 1988 - ss. 170DC, 170DE. Industrial Relations Reg - 30B(1), (c) (ii). Cases: Nicholson -v- Heaven and Earth Gallery P/L (1994), 57 IR 50. JOAN MARY SHERIDAN -V- MINTER ELLISON MORRIS FLETCHER SOLICITORS No. NI 2436 of 1995 COURT: WALKER JR PLACE: SYDNEY DATE: 11 OCTOBER 1995

INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES REGISTRY No. NI 2436 of 1995 BETWEEN: JOAN MARY SHERIDAN Applicant AND: MINTER ELLISON MORRIS FLETCHER SOLICITORS Respondent CORAM: WALKER JR PLACE: SYDNEY DATE: 11 OCTOBER 1995 REASONS FOR JUDGMENT The applicant Joan Mary Sheridan was employed by the respondent Minter Ellison as a tea attendant at their Martin Place office. She commenced her employment on 27 March 1995 and according to her contract of employment was placed on a three month trial period as set out below: "Probationary employment: you will be employed for a probationary period of three months. During this probationary period, you will have an opportunity to decide whether you are satisfied with the job, and you must satisfy the company that you have the qualities necessary for, and are capable of, performing the duties assigned to you at the level of achievement required by the company. At the end of the probationary period, the company may decide to offer you permanent employment". The applicant worked from 12.00 noon to 7.00 pm, Monday to Friday with a 30 minute lunch break and a 20 minute tea break. It was the applicant's evidence that her tea break was for 10 minutes, however, the statement of duties, marked as "DS3" to the affidavit of Deborah Jane Stonley allows for a 20 minute break. It was also the applicant's evidence that the first time she saw the statement of duties was the day before this hearing commenced when her lawyer provided her with the document. It was also her evidence that she was given one day's instruction and was then left alone to carry out her duties. In defence to the application the respondent claims that the applicant is excluded from the operation of the Industrial Relations Act 1988 by Regulation 30 B, as she was serving a period of probation. There was agreement that she was serving a three month probationary period, however the applicant maintains that that although the period of probation was determined in advance of her commencing her employment, it was not reasonable, having regard to the nature and circumstances of the position of tea attendant. Counsel for the respondent argued that as the applicant's supervisor Nulla Moriarty commenced her shift at 6.30 am and finished at 2.00 pm, there would only be minimal supervision by her of the applicant and that therefore a greater period of probation would be warranted. In fact as the applicant was required to take her l hour lunch break between, 1.00 pm and 1.30 pm the period of supervision of the applicant by her supervisor would only amount to one and a half hours per day. The respondent's Counsel based his reasoning for the proposition of an extended period of probation on the comments made by Chief Justice Wilcox in Nicholson v Heaven & Earth Galleries. The appropriate passage relating to probation in that case is set out below: "In some cases, evidence might be available concerning the practice in the particular industry. If so, the evidence would be relevant to the issue of reasonableness. It might be helpful, even decisive. But it is not necessary, or desirable, for expert evidence to be called in relation to the reasonableness, of a particular stipulation. Whether or not the stipulated period is reasonable, is a matter that has to be determined by the person hearing the case, as an exercise of judgment. The judgment should be based on the proved objective facts, not on someone else's opinion. Probably the most important consideration, in determining what is a reasonable period, will be the nature of the job. In the case of a person employed to carry out repetitive duties under close supervision, a reasonable period may not extend beyond a week or two. In the case of a person employed in a marketing or managerial position, working with little or no direct supervision and whose quality of performance cannot be immediately apparent, it may be reasonable for an employer to specify a probationary period measured in months. Circumstances will vary from case to case; the size, location and mode of operation of the employer being relevant factors, along with the personal characteristics and circumstances of the employee. The legislature has not prescribed the maximum extent of a reasonable period. It is not for me to do so. But I suspect that an employer will rarely be able to justify a period exceeding two or three months, in the case of an employee to whom Pt VIA now applies; that is, an award employee or a non-award employee whose wages do not exceed $60,000 per year. See s.170 CD of the Act. I think it was reasonable in the present case for Mr Holt to stipulate a two-month probationary period. Mr Nicholson was to be appointed to a position involving a high degree of operational independence. He was expected to initiate ideas and develop marketing programmes. Necessarily, their worth would take time to evaluate. He was not to be under direct supervision. He was to be responsible only to the company's directors. They resided on the North Coast of New South Wales and visited Sydney only occasionally. They would not be in a position to form a quick appreciation of his attitude, aptitude and efficiency. It was reasonable to believe that it might take a couple of months before the parties could be certain that the appointment was appropriate." It was further argued in the present case by counsel for the respondent that the applicant's duties were rather more than just that of a tea lady and involved an element of public relations. The applicant agreed to this proposition and I am sure that all tea attendants are required to act in a courteous and pleasant manner with members of staff and clients, but to place this function on any higher plane would be surely stretching the understanding of the functions of such a position in the circumstances of this case. It is also noted that there is no function relating to these tasks made mention of in the duty statement tendered as part of Deborah Jane Stonley's affidavit. The duties as set out in that document are typical of the usual duties of tea attendants and without attempting to denigrate such a position I would be of the opinion that the occupation would be quickly learnt within a few weeks, despite the requirement to serve teas and sandwiches at various monthly meetings. The claim that the applicant was only supervised by her direct supervisor, Nulla Moriarty for about two hours per day is not sufficient to justify extending the probationary period to a term of three months. In any case the applicant would have been subject to supervision by virtually all other staff employed by the respondent to some degree by the very nature of the type of tasks she carried out and also by Mr Mark Studd, the manager of business services. An appropriate period of probation in the circumstances of this case, would in my opinion be for two weeks and certainly no more that one month. The Chief Justice in the Heaven & Earth case was of the opinion that: "... an employer will rarely be able to justify a period exceeding two or three months, in the case of an employee to whom Pt VIA now applies... " On this reasoning, using three months as the top of the scale for an employee who is required to demonstrate a high level of skill in a complex managerial position where there may be little supervision, a period of two weeks probation for a tea attendant would appear more than appropriate. THE REASON FOR TERMINATION Deborah Stonley, the respondents' Personnel Manager terminated the applicants employment nine weeks after the applicant had commenced work as a tea attendant. Ms Stonley gave evidence that she had had little contact with the applicant up until the first meeting on the 18 May 1995. This meeting had been arranged she said because Mark Studd, the manager of business services and the applicants supervisor Ms Nuala Moriarty had expressed concerns about aspects of the applicants performance and how she was fitting in a personal way with other staff with whom she worked. Mr Studd was not called as a witness. Ms Stonley, in paragraph 4 of her affidavit, on page 2 was of the opinion, "At this stage I was not aware that there was any major problem with Joan's performance and I intended simply to convey our concerns to her, discuss with her whether she had any problems and identify the areas in which there needed to be improvement." It appears therefore, that at this stage of the applicants career, that is the 18 May 1995 there were no real problems with the applicants work that were serious enough in Ms Stonley's understanding to even consider termination. The meeting was just a friendly chat, to put it in Ms Stonley's words, "to provide feedback about how the applicant thought she was doing and to provide feedback about her performance and how she was settling in". During this meeting Ms Stonley said she began by telling the applicant about some of her positive aspects about her performance and asked her how she was enjoying her job. Ms Stonley said this then led to lengthy discussions about some personal problems the applicant was experiencing which were unrelated to work and that after this the applicant's behaviour and manner became strange. Ms Stonley said the applicant spoke rapidly and with exaggerated gesticulations and when she attempted to turn the conversation around to performance issues the applicant became very defensive and aggressive. Ms Stonley said she was confident that at the end of the meeting the applicant did have a clear understanding as to the areas of her performance that needed improvement, however arising out of the meeting, she said were fresh concerns about her behaviour and the extent to which she was suitable for a position which required regular interaction with clients and staff of the firm. Because of these concerns Ms Stonley said she asked Ms Moriarty to keep a close eye on the applicant as she felt she had emotional problems. I find this statement somewhat difficult to understand considering the fact that Ms Moriarty was only at the office for about an hour and a half each day the applicant worked. During the following nine working days, Ms Stonley said that the applicant showed no signs of improvement and that in particular the applicant continued to leave the building regularly for periods of up to half an hour at a time and she often did this after 4.pm. Ms Stonley said she was advised by Ms Moriarty that the applicant's behaviour was deteriorating and that she was constantly distracted, emotional, and at times irrational, and was constantly making telephone calls. On the 31 May 1995, Ms Stonley said she received a phone call from Ms Moriarty expressing concerns about the applicants behaviour and in particular that the applicant was, "off the planet". Ms Stonley said that, "By this time, our concerns about Joan's behaviour at work outweighed the concerns about particular aspects of her performance of her duties and I decided that in all circumstances her employment should be terminated quickly." It is clear from this testimony that the reason for termination was not to do with performance, or the failure to follow instructions but rather the perception by Ms Stonley that the applicant was suffering from some emotional problems. It is also clear from the evidence that Ms Stonley had decided to terminate the applicant prior to the 1 June 1995 in fact the termination cheque was dated on that day. The applicant's version of the termination is set out in paragraph 16 of her affidavit marked as exhibit 3 and is set out below: "16. At approximately 3.30 pm when I returned from the chemist, Deborah Stonley was waiting for me at Level 10 reception. Deborah said in front of Anne Dickinson and Karyl, the receptionist: "Joan I want to see you.." We went into a conference room and then had a conversation in or to the following effect; Deborah said: "It must hurt you to cough! I am here with bad news for you, I have to dismiss you." I said: "Can Mark Studd be present?" Deborah said: "No he can't be." I was shocked and said: "For what reason?" She said: "Things haven't been working out. You have not been concentrating and you have been missing from the office." I said: "I've always got my pager on" She said: "You've had many phone calls this week." I said: "I,ve only had three" [on reflection I believe I had 5 telephone calls] She then said: "Including one to Channel 9." I said: "how did you know?" She said: "Nuala said so I wish we could keep you on but Nuala's well liked." Annexure DS2 to the affidavit of Deborah Stonley is a file note to the termination meeting of the 2 June 1995. This file note is prefaced with the following paragraph, "Mark Studd and Nuala Moriarty spoke to me on Wednesday, 31 May. Both were extremely concerned about Joan's behaviour. In the past week she has become very distracted, could not focus on the job and disappeared for large periods of time during the day. Nuala was concerned Joan working on her own in the afternoon and phoned Mark and myself from home to express her concerns." Ms Stonley then reports that she indicated to the applicant that the performance problems she had discussed on the 18 May had not improved, that the applicant had disappeared for large amounts of time in the afternoon, particularly after 4.00 pm and that Justine the Ground Floor receptionist had confirmed this and that she had not responded to her pager. Ms Stonley then states that the applicant was very distracted and was unable to perform effectively. Ms Stonley then states that the applicant disputed each of these points and then became abusive, irrational and unable to maintain her composure. There is no mention in this report that the applicant was constantly using the telephone, however there is a reference that there has been no improvement in the performance problems. THE PERFORMANCE PROBLEMS 18 MAY 1995 MEETING The performance problems which were brought to the applicants attention at the first meeting on the 18 May 1995 are set out in annexure DS1 of Ms Stonley's affidavit and I will deal with each of them in turn. The first issue is as follows, "Joan requires a lot of supervision, is easily side-tracked, some days much worse than others." Throughout the evidence in this matter there was never any allegation that the applicant did not perform he duties as a tea attendant efficiently, in fact the evidence all points the other way. It would seem that her supervisor, Ms Moriarty became aware that the applicant had left the building after 4.00 pm when the applicant had been complimented by one of the partners secretaries for her initiative in finding a lemon in a cafe in Martin Place when the office had run out of lemons. The reality in this case is that the applicants supervisor was only in the office for no more than one and a half hours during the applicant working day and was never in a position to observe the applicant at work. It was also very clear that there was some sort of personality clash between Ms Moriarty and the applicant. The second issue was, "Often misplaced keys." The applicant agreed that she had misplaced keys when she first commenced her employment, however she had then written a note and placed it on the locker to remind herself not to do it again and said in her evidence that she did not repeat the incident again. This evidence was not contested. The third issue was, "Forgets to take keys out of the cupboard. Nuala has come in on five mornings to find Joan's keys still in the cupboard." This issue was also resolved by the above method and was not repeated again and this evidence was not disputed. The fourth issue was, "Having difficulties working with Ann Dickenson." The applicants evidence was that this problem had been resolved and this was not disputed by the respondent. The fifth issue was, "Spends a lot of time in the kitchen particularly when Lee (the chef) is in. There was no mention of this issue by the respondent during the hearing and the allegation was not put to the applicant at the time of termination. The sixth issue was, "Disappears during the afternoon for long periods of time (up to half an hour). This was the only issue listed at the meeting of the 18 May 1995 that was put to the applicant at the time of termination and the allegation was denied by the applicant. Ms Stonley said this issue was confirmed by Justine, the ground floor receptionist however this person was not called as a witness at the hearing and all other reference to this issue are based upon hearsay. Ms Karlene Therese Gudgeon, the receptionist on level 10 gave evidence in this matter that she had observed the applicant leave the building after 4.00 pm however this was only during the period up to the 8 May 1995 when she was the ground floor receptionist and was therefore not able to confirm that the applicant left the building after that date. It was the applicants evidence that she did leave the building to have a cigarette but this was during her tea break. The evidence was that the respondents building was a smoke free zone and it was common practice for smokers to have to leave the building in order to have a cigarette. It is also clear from annexure DS3 of Ms Stonley's affidavit that the tea break was for a period of 20 minutes and not 10 minutes as the applicant understood. There was no real evidence to substantiate the claim that the applicant was missing for long periods up to half an hour and it is quite reasonable that she may have been carrying out duties on other floors. There was also evidence that the pager the applicant carried had failed to operate from time to time which might explain an occasional failure to respond. The final issue was listed as behaviour, "Displays at times bizarre and unstable behaviour. Very intense, defensive and acts very strangely at times." This issue was not apparent before the meeting with the applicant on the 18 May and it appears from the file note of the meeting that the applicant was not informed that she was required to improve in this area at her review in June. There was certainly no evidence to suggest that the applicant displayed this type of behaviour in the conduct of her work and towards the people she was serving, in fact Ms Sandra Smart gave evidence to the contrary when she said at paragraph 6 of her affidavit, "I met Joan Sheridan shortly after she commenced in March 1995 and I found her to be a warm and caring person. Joan was completely different to Nuala and Anne and was open and chatty with the professional staff. She appeared to me to be able to carry on a conversation for a short period of time with them without any difficulty whereas Nuala and Anne could not." TERMINATION MEETING 2 JUNE 1995 This meeting was attended by the applicant and Ms Stonley and although the applicant requested Mr Mark Studd to be present, no independent person was there. The applicant disagreed that the reason given to her for her dismissal was that she had left the building after 4.00 pm. She said she had asked Ms Stonley why and was told, concentration, focus and telephone calls. Ms Stonley's file note of the meeting states that the performance problem discussed previously had not improved however there was not a scrap of evidence to support this claim in the nine working days that followed the meeting of the 18 May 1995. The applicants evidence was that she had left the building in the afternoon to have a cigarette during her tea break and that during this time she always had her pager with her if she was required urgently. The performance issues listed on annexure DS1 of Ms Stonley's affidavit were never relevant to the meeting on the 2 June 1995 except for the issue of, "disappears during the afternoon for long periods of time (up to half an hour). In fact the applicant was allowed to "disappear" for twenty minutes, according to the Duty Statement annexed at DS3 to Ms Stonleys affidavit. I am satisfied that on the evidence produced by Ms Stonley in this matter the real reason for the termination was not based on the issues raised on the 18 May, but rather that after that meeting she gained the impression that the applicant was suffering some emotional problems and that there was a personality clash between Ms Moriarty and the applicant. During the hearing it became apparent that the applicant was suffering certain problems brought about because of her litigation in the "Home Fund" case being dealt with in the Federal Court and that because of this litigation she had made phone calls although it was conceded that employees were allowed to make personal calls. It is also significant that at the meeting of the 18 May 1995 there was no mention that there was an issue with regard to telephone calls at all. Ms Stonley made no investigation as to the allegations made against the applicant by Ms Moriarty, especially the statement made by telephone on the 31 May when Ms Moriarty said the applicant was, "off the planet." Ms Stonley was also unaware that the applicant was a smoker and would therefore be required to leave the building to have a cigarette in order to comply with the office non - smoking requirement and there was no real evidence given to substantiate the claim that the applicant left the building for long periods in the afternoon. I am also satisfied that the evidence given by the applicant in paragraph 16 of her affidavit attributing to Ms Stonley the statement, "I wish we could keep you on but Nuala's well liked", is a further reason for the decision to terminate. BREACH OF SECTION 170 DE and 170 DC For there to be a valid reason for the applicants termination the respondent would be required to investigate as fully as the circumstances permit the allegations, particularly allegations by a supervisor who was not present during the duration of the applicants employ and then inform the applicant precisely what those allegation were and then give the applicant a fair and full opportunity to defend herself against each of them. All of the performance problems brought to the attention of the applicant at the meeting of the 18 May 1995 were resolved before the termination meeting on the 2 June with the exception of leaving the building for a cigarette. Had Ms Stonley taken the care to find out the reason for the applicants need to leave the building to smoke I am sure this problem would have been resolved without any fuss. I am therefore satisfied that in the circumstances of this case the termination of the applicants employment was harsh, unjust and unreasonable and a breach of the requirement of section 170 DC. REMEDY In the circumstances of this case I am satisfied that re-instatement is impractical and I am therefore required to consider an amount of compensation. I find that the appropriate amount of compensation is three months pay and I do so order.